Gross Profit
Revenue less the direct cost of the goods or services sold, before operating, financing and tax costs.
Formula
Gross Profit = Revenue - Cost of Goods Sold
Unit
₹ crore
In depth
Gross profit isolates the economics of the product itself: what is left after making the thing, before the cost of running the company. A stable or rising gross margin through a cost-inflation period is strong evidence of pricing power, which is one of the most valuable things a business can have. Because classification between direct and indirect costs varies, gross margins are comparable within an industry but not across industries — a software company and a steel company are not measured on the same scale. Indian filings often do not present a gross profit line explicitly, so it must be constructed from the component costs.
Worked example
Revenue ₹1,000 crore and COGS ₹600 crore give gross profit of ₹400 crore and a gross margin of 400 / 1,000 = 40%. If input costs rise 10% next year and margin holds at 40%, the company passed the increase through.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Gross Profit” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.